Transforming performance and profitability through employee engagement

Peninsula Team

July 30 2010

“We believe that if employee engagement and the principles that lie behind it were more widely understood, if good practice was more widely shared, if the potential that resides in the country’s workforce was more fully unleashed, we could see a step change in workplace performance and in employee well-being, for the considerable benefit of UK plc”.

David MacLeod and Nita Clarke (2009) Engaging for Success; enhancing performance through employee engagement.

The purpose behind this article is to help raise the profile of employee engagement; explain what it means in practice; identify its benefits and consider some of the tools that can assist employers in their efforts to embrace employee engagement in the workplace.

For many working people, Monday mornings can be an especially low point in the week. Perhaps The Boomtown Rats accurately judged the prevailing mood in 1979 when their hit single “I don’t like Mondays” stayed at No 1 for four weeks.

Employee engagement can however be a key to not only unlocking productivity, but also transforming the lives of many working people.

At its heart, employee engagement is a simple but profound concept, which was perhaps best captured by the researchers at Kingston University, when they said:

Fundamental to the concept of employee engagement is the idea that all employees can make a contribution to the successful functioning and continuous improvement of organisational processes. Engagement is about creating opportunities for employees to connect with their colleagues, managers and the wider organisation. It is about creating an environment where employees are motivated to want to connect with their work and really care about doing a good job

The MacLeod Report, commissioned by the Government of the day and published in July 2009, set out the comprehensive evidence showing the link between employee engagement and organisational performance. Engagement expert and report author David MacLeod said:

This is about unleashing the potential of people at work and enabling them to be the best they can be. Whether we are in a downturn or in better economic times, engagement is a key to innovation and competitiveness”.

The benefits for businesses and organisations that understand and embrace employee engagement are there for all to see. Employees who are committed to their work are much more likely to behave in a positive manner to benefit their employer. Furthermore, they are less likely to take sickness absence and productivity as well as performance levels are likely to improve, leading to more profitable businesses. In short, research has shown without doubt, clear links between engaged employees and:

• bottom line performance;
• customer satisfaction and loyalty;
• absence;
• employee turnover; and
• creativity and innovation.

To further illustrate the hallmarks of employee engagement, it is perhaps helpful to look at the factors often associated with employee disengagement, so as to illustrate the importance of employee engagement in today’s workplace. Lower or poor levels of engagement are more likely to be found where there is perceived unfairness or inequality in reward or recognition schemes; where there are feelings of job insecurity; where employees feel they have no route to promotion.

With that in mind, it is almost inconceivable to think of a business or organisation that would not wish to create the right conditions in the workplace so as to unlock their employees’ potential. As the MacLeod Report concluded:

Businesses and organisations function best when they make their employees’ commitment, potential, creativity and capability central to their operation. Clearly, having enough cash, and a sensible strategy, are vital. But how people behave at work can make a crucial difference between business and operational success or failure”.

According to the MacLeod Report, there are four main drivers or enablers which are critical to achieving a level of employee engagement that will actually start to make a difference to the “bottom line

Leadership: Leaders “must provide a clear vision” and employees need to know how their individual roles contribute to that.

• Engaging Managers: Managers must treat their staff as “individuals, with fairness and respect, and with a concern for their well being”. The importance of appreciation, training and personal development should not be overlooked.

• Employee Voice: Views of the employees “should be sought out and valued”. They should be made to feel that their opinions count and do make a difference. “Effective communication is one of the hallmarks of employee engagement”.

• Integrity: Trust in an employer, which arises when employees witness the stated values of an organisation being lived out in practice,” constitutes another powerful enabler of engagement”.

Understanding an idea in theory however, is only part of the picture. Employers also need to go on and actively address the question of engagement and, how it can be effectively implemented within their own organisation.

First and foremost, it’s necessary for employers to have in place a mechanism for measuring employee engagement, and this is most commonly achieved by undertaking an employee survey. Once established as part of the fabric and culture of the organisation, such surveys can then be repeated annually or bi-annually, so as to measure the effectiveness of employee engagement. And, once the outcomes of the survey are known, employers can, with outside assistance if necessary, devise policies practices and procedures designed to build on employee engagement in the light of the survey results.

Given that engagement has been described as an employees’ drive to use their ingenuity and resources for the benefit of their employer, this is not a static concept and one that will need to be refreshed and revisited. But above all, to be a success and make a difference, an employee engagement programme should not be seen as just another HR initiative. It is, and can be, so much more than that.

In helping employers take the initiative, ACAS have identified a number of key steps to be taken in the running of an effective employee engagement survey. They include:

• securing visible support and backing from the top of the organisation;
• involving employees in its design, format and mechanics;
• maintaining confidentiality;
• encouraging everyone to take part;
• taking great care over the range and type of questions to be asked;
• being able to benchmark and compare the results; and
• reporting back to employees and then taking action based on the results.

Formulating the right questions to ask employees, to help improve employee engagement within an organisation, is undoubtedly the most important first step. Here is some help in the form of the Gallup Q12; a 12 question survey that was devised for this very purpose. Whilst recognising that “precedents are poor masters but useful servants”, these questions may help employers establish the first signposts on the road towards employee engagement. It includes such questions as:

• Do you know what is expected of you at work?
• In the last seven days, have you received recognition or praise for doing good work?
• Is there someone at work who encourages your development?
• At work, do your opinions count?
• Do you have a best friend at work?
• In the last six months, has someone talked to you about your progress?

Employers however should not lose sight of what they are ultimately seeking as they embark on this road. Typically, they are trying to find out:

• levels of trust within the organisation;
• whether there is effective communication and consultation within the office;
• whether employees feel valued;
• whether employees are treated fairly and are respected;
• what issues there are that might be preventing employees from performing and feeling better.

Once the results of the workplace survey have been collated and the implications understood, employers can then start to put into place, some of the building blocks that will be necessary to improve employee engagement. It is likely that attention will need to focus on areas such as:

• recruitment, selection and induction;
• pay, rewards and benefits;
• flexible working and work-life balance;
• communication and involvement;
• employee representation;
• discipline and grievance; and
• managing change.

Employers must not underestimate the crucial role that line managers have to play in influencing and shaping employee engagement. Whilst the HR department will design appropriate policies, it will be up to line managers to bring them to life. They therefore have a pivotal role to play in building employee engagement amongst the teams that they are responsible for.

In looking at the way that work is organised, how relationships are conducted, and the levels of trust and co-operation within an organisation, employers must not loose sight of the fact that employee engagement is ultimately two sides to the same coin. It involves give and take by employer and employee alike. As part of the engagement contract with the workforce, employers will hope to provide employees with:

• opportunity for job satisfaction;
• training;
• equal opportunities;
• clear objectives;
• flexible working and a healthy work-life balance;
• fair pay; and
• regular communication and consultation.

And in return, the hallmark of a fully engaged employee will be:

• effective performance;
• loyalty and motivation;
• flexibility;
• an understanding of the bigger picture;
• personal development.

Employers really ought to put the issue of employee engagement on the agenda of their next board meeting. But in the meantime, ask the PR/HR Department to start thinking about an on-line newsletter; canvass views about an employee council or employee representatives; reflect on whether it was such a good idea to have been so inflexible about employees being able to watch England’s final group game in the World Cup Finals on that Wednesday afternoon in June. Finally, commit to walking round the office simply to chat to staff in different areas of the business at least once a week.

One never knows; employees may just start confusing their Mondays with their Fridays!

Suggested Resources